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Emergencies happen. When they do, it is good to have some extra money to tend to that emergency. Not everyone had money lying around so, more often than not, people turn to loans. Unfortunately, those with bad credit might have trouble with getting loans. Luckily, bad credit loans exist—but before we get into bad credit loans, we must first know what constitutes bad credit.

What is Bad Credit?

Bad credit is a record of past failures to pay bills regularly and on time. You may not have been able to pay the bills at all. These are all noted in your credit history, which credit bureaus collect and compile into a credit report. Based on your credit report, the credit bureau calculates a FICO score. If you have a score lower than 650, you have bad credit. kighall.com has more information on the debt consolidation.

What are Bad Credit Loans?

Simply put, bad credit loans are personal loans given to those with bad credit. Several financial institutions offer bad credit loans, from banks to online lenders to credit unions, among many others.

What are the Types of Bad Credit Loans?

There are two types of bad credit loans that people with bad credit can choose from: unsecured bad credit loans and secured bad credit loans.

Unsecured bad credit loans are loans where borrowers sign a contract that states their promise to repay the loan according to the terms and conditions of the contract. Failure to repay the loan often means that the lender can pursue payment through legal means. Kinds of unsecured bad credit loans are student loans, personal installment loans, and credit cards.

Secured bad credit loans are loans that require collateral to secure the loan. The collateral is usually a valuable item such as a house, a car, or jewelry. Failure to repay the loan means that the lender can collect the collateral and sell it to recoup their losses. Types of secured bad credit loans are mortgages, pawnshop loans, and car title loans.